U.S. stocks tilted lower in midday Monday trades, carrying over the prior session's steep losses as battered financial shares weighed and as crude-oil futures shifted higher, turning the market's focus away from a $4 billion takeover in the agricultural space.
"It's still the financials, they are just a disaster, and breaking down on a daily basis. The market is not going anywhere until the financials stabilize," said Peter Boockvar, equity strategist at Miller Tabak.
The Dow Jones Industrial Average (DJI) was off 19.14 points at 11,823.55 in midday action, with 18 of its 30 components trading lower, led by General Motors Corp. (NYSE:GM) (GM), off 5.9%, and American International Group Inc. (NYSE:AIG) (AIG), down 5%.
The blue-chip barometer's other financials also fell: Shares of Citigroup Inc. (NYSE:C) (C) traded down 3.7%, J.P. Morgan Chase Co. (NYSE:JPM) (JPM) sank 3%, Bank of America Corp. (NYSE:BAC) (BAC) lost 3.2%, and American Express Co. (NYSE:AXP) (AXP) dropped 0.9%.
The financial sector was slammed by reports of layoffs at investment banking divisions of Citigroup (NYSE:C) and Goldman Sachs Group Inc., along with downgrades of the financial and consumer discretionary sectors.
Dow gains were fronted by its oil producers, with Exxon Mobil Corp. (NYSE:XOM) (XOM) adding 2.2% and Chevron Corp. (NYSE:CVX) (CVX) gaining 1.5%.
Oil prices were again a key consideration in investors' decisions. Over the weekend, Saudi Arabia pledged to boost production by 200,000 barrels a day. .
In Monday's energy trading, crude was up, rising $2.64 to $138.00 a barrel in electronic trade on Globex.
"The issue of oil is just a pile-on. It's the banks that are driving stocks," said Boockvar.
The S&P 500 (SPX) dropped 2.63 points to 1,315.3. Of the S&P's 10 industry groups, the financial sector suffered the most, off 2.2%, followed by consumer discretionary, down 1.7%.
Shares of Circuit City Stores Inc. (NYSE:CC) (CC) dove down 16%, as the electronics retailer explored its options after a buyout offer from Blockbuster Inc. (NYSE:BBI) (BBI)
Elsewhere in the retail sector, shares of J.C. Penney Co. (NYSE:JCP) (JCP) got a lift, up 0.4%, after an upgrade from Deutsche Bank. Shares of other retailers were mixed. .
Energy set the pace for S&P sector gainers, up 3%.
The technology-laden Nasdaq Composite (RIXF) fell 17.38 points to 2,388.71.
Volume on the New York Stock Exchange neared 480 million shares, with decliners topping advancers nearly 2 to 1. On the Nasdaq, 370 million shares traded, and decliners outpaced advancing issues more than 2 to 1.
The decline followed an intense drilling of U.S. stocks Friday, when the Dow industrials tumbled 220 points, pummeled over worries about oil prices and the health of financial companies, to peg the week's losses at 3.7%.
M&A action
On the deals front Monday, Bunge Ltd. (NYSE:BG) (BG) said it would acquire stock and assumed debt in a deal for Corn Products (NYSE:CPO) (CPO) valued at about $4.8 billion. .
And, clearing the way for the largest leveraged buyout on record, Canada's Supreme Court ruled Friday that the purchase of telecom giant BCE Inc. (NYSE:BCE) (BCE) for about $35 billion should be allowed to proceed. Shares of BCE gained 7.3%. .
Republic Services Inc. (NYSE:RSG) (RSG) reached terms on a plan to buy Allied Waste Industries Inc. (NYSE:AW) (AW) for $14.07 a share in Republic stock. .
Overseas, the Nikkei 225 fell 0.6% Monday in Tokyo , while the pan-European Dow Jones Stoxx 600 index ended fractionally lower at 294.81. .
(END) Dow Jones Newswires 06-23-08 1245 Copyright (c) 2008 Dow Jones & Company, Inc.
